At a 35 percent income tax rate, bronze medalists will owe the IRS a total of $3,500, silver medalists will owe $5,250 and top finishers will be liable for $$8,750, according to Americans for Tax Reform.

Of course, many high-profile athletes will also come home to lucrative sponsorships offers, also all taxable.

But American athletes aren't the only Olympians vying for the gold -- or big prize money.

Though Malaysia has never won a gold medal in an Olympic Games, Andrew Kam, the owner of a gold mine and the Kuala Lumpur Racket Club, will award a 12.5 kilogram (27.5 pound) gold bar (market worth $630,000) to any badminton player who earns the top spot.

There had been controversy leading up to London Games regarding Britain's stringent tax laws, which ordinarily take a large cut of the global income of any international athlete competing on its soil. The policy has led some athletes, including golfer Sergio "El Nino" Garcia and tennis star Rafael Nadal, to abstain from competing in British tournaments.

Correction: A previous version of this article incorrectly stated how much medal winners could be taxed on their prize money. At a 35 percent income tax rate, bronze medalists would owe the IRS $3,500, silver medalists would owe $5,250 and gold medalists would owe $8,750.

UPDATE: Senator Marco Rubio (R- Fla.) introduced a bill to Congress on Wednesday that would exempt Olympic winners from taxes on prizes received at the London games.